Summary of 'The Mom Test' (v2 2013-11-05)

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How to talk to customers and learn if your business is a good idea when everybody is lying to you

Book by Rob Fitzpatrick

Summary by Max Völkel

Published in: Business, Self Improvement
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  • Summary of 'The Mom Test' (v2 2013-11-05)

    1. 1. The Mom Test How to talk to customers and learn if your business is a good idea when everybody is lying to you Book by Rob Fitzpatrick Short Summary by Max Völkel v.2 2013-11-05 1 Institut für Entrepreneurship, TechnologieManagement & Innovation
    2. 2. The Mom Test How to talk to customers and learn if your business is a good idea when everybody is lying to you – book by Rob Fitzpatrick – summary by Max Völkel EnTechnon – INSTITUT FÜR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION KIT – Universität des Landes Baden-Württemberg und nationales Forschungszentrum in der Helmholtz-Gemeinschaft www.kit-gruenderschmiede.de
    3. 3. Introduction Dr. Max Völkel EnTechnon / KIT www.xam.de @xamde max.voelkel2@kit.edu 3 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    4. 4. Introduction Content Type Icon Content Type Icon Learning Objectives 1 Information 3 Agenda 2 Attention/Important to know 1 Learning Unit 1 Questions 4 Exercise 1 Summary 1 Case Study 1 Literature 1 1 Icon designed by Brightmix 2 Icon designed by Designmodo (http://designmodo.com) from The Noun Project 3 Icon designed by Philipp Süß from The Noun Project 4 Icon designed by Juan Garces from The Noun Project 4 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    5. 5. Learning Objectives After today‗s session you will be able to… Do better customer conversations! Based on „The Mom Test“ by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013 Note: Talking to customers is a sub-topic of Customer Development. You still need to read other books for the whole story. All content is taken from the book. If it‗s wrong, I misunderstood it. 5 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    6. 6. Agenda Introduction What is the problem? - The Mom Test How to talk? To whom to talk? Use your data Summary 6 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    7. 7. People try to be nice. Therefore they lie in your face without realizing it. Bad data is worse than no data. E.g. „I would definitely buy that― Let‘s look at an example. THE PROBLEM 7 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    8. 8. The Mom Test – What people say You: Mom, I have a business idea. Do you have 5 minutes? Mom: Of course, dear … You: You like your iPad and use it a lot? Mom: Sure, it‘s great. … You: Would you buy a cookbook app? Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas? … 8 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    9. 9. The Mom Test – What people think You: Mom, I have a business idea. Do you have 5 minutes? Mom: Of course, dear I‘m proud of you and I don‘t want to hurt your feelings You: You like your iPad and use it a lot? Mom: Sure, it‘s great. I use it to check email on the sofa. You: Would you buy a cookbook app? Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas? Well, I have plenty of cookbooks. I don‘t need a computer in my kittchen – it might get dirty! But hey, if my kid made it, I‘ll try. App? I never bought an app. Don‘t you need to enter your credit card for that? Let me try to change the subject. 9 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    10. 10. The Mom Test – How to do it right You: Mom, when have you last time used the iPad? For what? Have you ever used it in the kitchen? Have you ever bought an app? Which? Why? For how much? Do you use your cookbooks? Is there anything you dislike about them? What was the last cookbook you bought? When? Why? 10 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    11. 11. HOW TO TALK? 11 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    12. 12. What to Ask? Important Questions Good Imagine your company failed. Why did it fail?  questions Imagine your company is a huge success. Why?  questions Ask those questions “You should be terrified of at least one of the questions you’re asking in every conversation.” 12 Dr. Max Völkel, 2013 Bad Deep inside, you are afraid your idea might be crap. So you ask bogus questions. These are the 2 questions than can convince your team do use this whole process at all Institut für Entrepreneurship, TechnologieManagement & Innovation
    13. 13. How to Frame the Conversation? Casual Good: Keep it casual Ideal: One non-meeting about the 3 best questions Instead of asking ―Do you have time for a meeting with me?‖ ask simply your 3 questions, casually, during a conversation Takes maybe 5-15 minutes. Bad Customer Development advises to have 3 meetings: 1) the first about the customer and their problem 2) the second about your solution 3) the third to sell a product That takes a lot of time. Always have your best 3 questions in your mind 13 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    14. 14. How to Introduce Your Idea? Indirect Good A colleague told me and idea I read somewhere ... Bad I ... Danger: Don‗t expose your ego – people try to be nice, but unfortunately, they lie in your face to do that Bad Data: Compliments (back in the office) ―Everybody loved our idea‖ Indicator you exposed your ego 14 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    15. 15. Listen more, Talk less Good You listen mostly and ask questions Customer talks a lot 15 Dr. Max Völkel, 2013 Bad You pitch and try to convince the customer of anything Institut für Entrepreneurship, TechnologieManagement & Innovation
    16. 16. About what to talk? Specifics Good Their life Specifics in the past How do you solve X now? Why do you bother? What are the implications? Talk me through the last time that happened. Talk me through your workflow. What else have you tried? Where does the money come from? Who else should I talk to?  expand target group Is there anything else I should have asked?  expand knowledge 16 Dr. Max Völkel, 2013 Bad Your idea Generics, Opinions Would you ... Bad Data: Fluff Generics ―I always/never…‖ Danger: Future Who knows ―I would/will..‖ what they Hypothetical would do? ―I might/could…‖ People imagine themselves pretty different from reality Institut für Entrepreneurship, TechnologieManagement & Innovation
    17. 17. When the customer has ideas ―you aren‘t allowed to tell them what their problem is – they aren‘t allowed to tell you what to build‖ Good Why do you want that? What would that let you do? How are you coping without it? Do you think we should push back the launch to add that feature, or is it something we could add later? 17 Dr. Max Völkel, 2013 Bad Data: Customer Ideas No direct data about their problems Bad Great idea, we will implement it and then hope you will buy it Institut für Entrepreneurship, TechnologieManagement & Innovation
    18. 18. Get commitment and advancement Good Meeting fails Bad Meeting ―went well‖ you learned a lot and saved lots of money Meeting success you got relevant data, e.g. you have nailed a problem In every conversation ask for: Commitment — They are showing they‘re serious by giving up something they value such as time, reputation, or money. Advancement — They are moving to the next step of your real-world funnel and getting closer to a sale. 18 Dr. Max Völkel, 2013 Otherwise: A pipeline of zombie leads Ending product meetings with a compliment Ending product meetings with no clear next steps Meetings which "went well" They haven't given up anything of value Institut für Entrepreneurship, TechnologieManagement & Innovation
    19. 19. Commitments Time Clear next meeting with known goals Sitting down to give feedback on wireframes Using a trial themselves for a non-trivial period Reputation risk Intro to peers or team Intro to a decision maker (boss, spouse, lawyer) Giving a public testimonial or case study Cash Letter of intent (non-legal but gentlemanly agreement to purchase) Pre-order Deposit 19 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    20. 20. “EXAM” 20 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    21. 21. Good meeting or bad meeting? ―That‘s so cool. I love it!‖ ―Looks great. Let me know when it launches.‖ ―There are a couple people I can intro you to when you‘re ready.‖ ―What are the next steps?‖ ―I would definitely buy that.‖ ―When can we start the trial?‖ ―Can I buy the prototype?‖ ―When can you come back to talk to the rest of the team?‖ 21 Prof. Dr. Orestis Terzidis fail, no commitment fail, no commitment mostly fail success fail, no cmmitment success in DE, faillure in US  success success Institut für Entrepreneurship, TechnologieManagement & Innovation
    22. 22. Common Mistakes In a real meeting the conversation moves to the product/solution - bad data You are lazy and call instead of commute - Conversation becomes formal - You miss body language - You don‘t become friends, so you‘ll keep cold-calling + But maybe it works for you Bad: a customer-learning-but-I-really-want-to-do-sales meeting Good: let-me-find-out- if-you-are-a-good-advisor-by-asking-lots-ofquestions meeting How many meetings? 3-5 for simple industry & focused customer segment 10+ and still new results?  customer segment too broad 22 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    23. 23. TO WHOM TO TALK? 23 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    24. 24. To Whom To Talk? Choose your customers Find your customers Cold Contact Getting too many different results? Go back and choose a smaller customer segment. Warm Intros 24 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    25. 25. Choose your customers Start with the best smallest market and go global from there Otherwise you cannot understand/fulfill the specific needs and everybody asks for different features . How to choose a sub-segment: Why do they want it? e.g. What is their problem or goal? Does everyone in the group have that motivation or only some of them? Within this group, which type of this person would want it most? Would everyone within this group buy/use it, or only some of them? Company Market Initial market Google PhD students EBay The world Collectors of PEZ dispensers Evernote 25 The world The world Moms sharing recipes Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    26. 26. Find your customers For each customer segment: What are these people already doing to achieve their goal or survive their problem? Where can we find our demographic groups? Where can we find people doing the above workaround behaviors? If you cannot find them, you’ll never advertise nor sell to them Choose the segment that scores well for Profitable Easy to reach Rewarding for you to build a business around (Buying process?) 26 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    27. 27. Step 1: Finding initial conversations Cold calls – 2 out of 100 will talk to you Serendipity – there are often cool people already around you Find a good excuse I do my PhD on …., can I ask you some questions? Immerse yourself in where they are Landing pages Organize meetups  ―If it sounds weird to unexpectedly interview people, then that's only the case because Speaking & teaching you're thinking of it as an interview instead of a Industry blogging conversation. Get clever  The only thing people love talking about more than themselves is their problems. “The goal of cold conversations is to stop having them.” 27 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    28. 28. Step 2: Creating warm intros 7 degrees of separation – ―you can find anyone you need if you ask for it a couple times.― Industry advisors Universities (hint, hint) Investors Try to avoid a ―real meeting‖, if possible (keep it casual) To get a real meeting & in a real meeting: Vision Framing Weakness Pedestal Ask 28 Prof. Dr. Orestis Terzidis what we aim for, broadly why we meet you, what we expect why we need you a compliment try to get more commitment Institut für Entrepreneurship, TechnologieManagement & Innovation
    29. 29. USE YOUR DATA 29 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    30. 30. Customer conversations & your team Prepping – together with your team Choose the right 3 scary questions (If the answer is on Google, google it!) Due diligence on Xing/LinkedIn about your conversation partner Write down your assumptions about a person to validate them later Decide on what commitment you want Doing Who should show up Those who make decisions (at least to some meetings) 1-2 persons: 1) talking, 2) note-taking & fixing conversation How to write it down Note: emotions, problems, goals, workarounds, obstacles, ideas/feature requests, budgets/buying process, follow-up tasks, referenced persons/companies Maybe use 1 card for one information item Reviewing Review notes, update written assumptions, update 3 questions How can you improve to learn better next time? 30 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    31. 31. Summary Prepping Segment your customers What do we want to learn? – Your team needs to learn, not just you Doing Keep it casual Ask relevant questions about their specific past life Avoid bad data (compliments, fluff, …) Reviewing Good results facts commitments (time, reputation, cash) / advancement new conversation contacts 31 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    32. 32. Literature The Mom Test by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013 The 4 Steps to the Epiphany by Steve Blank Running Lean by Ash Maurya More references: http://bit.ly/entrep-links 32 Prof. Dr. Orestis Terzidis Institut für Entrepreneurship, TechnologieManagement & Innovation
    33. 33. Information License Information Creative Commons License Summary of 'The Mom Test' by Max Völkel is licensed under a Creative Commons AttributionShareAlike 3.0 Unported License (http://creativecommons.org/licenses/bysa/3.0/deed.en_US). Based on a work at momtestbook.com. 33 Dr. Max Völkel, 2013 Institut für Entrepreneurship, TechnologieManagement & Innovation
    34. 34. EnTechnon – INSTITUT FÜR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION 34 KIT – Universität des Landes Baden-Württemberg und nationales Forschungszentrum in der Helmholtz-Gemeinschaft Institut für Entrepreneurship, Technologie- www.kit-gruenderschmiede.de Management & Innovation
    35. 35. Information Thanks for watching. Now, please: Give a comment to let me improve Tell me what you liked and what you didn‘t like Like this on SlideShare, Facebook, Twitter, … Or buy the book (via my affiliate link ) The Mom Test https://www.amazon.de/dp/1492180742/?tag=xamde01-21 35 Institut für Entrepreneurship, TechnologieManagement & Innovation

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